Liberalise!

Curious about the latest news on the World Bank’s trade policy? Well, although the Bank is slow to share the good news (there’s no mention of this on the Bank’s front or press pages), the US Department of State is happy to evangelise. You can find out about the latest World Bank report, “Global Agricultural Trade and Developing Countries” by visiting the U.S. State Department’s website here.

Although there are no prizes for guessing what the policy recommendation is – liberalise, liberalise and, possibly, liberalize – it’s always interesting to observe the candour with which this policy is peddled. While the Bank’s Thinkers remain blinkered in the usual ways (no consideration of gender, environment, social relations, history, inequality, etc), the report does let a couple of truths trickle out. First, it observes that while developing country tariffs have fallen precipitously over the past 15 years, the OECD is busy jacking up its agricultural tariffs. They note that “a development strategy based on agricultural commodity exports is likely to be impoverishing in the current agricultural policy environment”, though this news clearly hasn’t reached the people at the World Bank in charge of telling developing countries what to do.

As the Bank notes, profits from structural changes as a result of liberalisation would accrue to the food processors. And are these processors the many or the few? Agriculture in Africa, if it wants to enter the U.S. market, the report observes, faces the especial burden of WTO-plus sanitary standards built into the African Growth and Opportunity Act, together with disturbing new efforts to rehash trade agreements from within the EU.

The Bank suggests that “Agricultural trade liberalization … would reduce rural poverty in developing economies, both because in the aggregate they have a strong comparative advantage in agriculture and because the agricultural sector is important for income generation in these countries.” Which may well be true in theory. But it is precisely the promise of this theory of welfare-capture and market-surplus that was used to persuade developing countries to liberalise agriculture in the first place, while the OECD did the opposite, profiting immensely. The Bank, it claims, wants the global North to return to the theory, and to abide by its promises. The fact is that the theory serves the North rather well for precisely this reason, that it provides a fig leaf beneath which U.S. and international agribusiness and capital can work their magic.

Read more from the magic kingdom here.